Intel backs away from manufacturing deal with Tower Semiconductor
Tower Semiconductor has disclosed that Intel does not intend to proceed with a previously signed agreement to manufacture 300mm wafers for Tower’s customers at Intel’s facility in New Mexico.
The information was disclosed in Tower Semiconductor’s fourth-quarter and full-year 2025 financial results, published in a press release on February 11.
As previously reported by Evertiq, Intel signed a contract in September 2023 to manufacture 300mm wafers for Tower customers as part of Intel Foundry Services. Tower now says Intel has “expressed its intention not to perform under the agreement,” and that the two companies are currently engaged in a mediation process.
Tower said that wafer flows already transferred, or in the process of being transferred, were originally qualified at Tower’s Fab 7 facility in Japan. Customers affected by the situation are now being redirected back to Fab 7 for continued support.
The company did not disclose the potential financial impact of Intel’s withdrawal. When the deal was announced, Tower described it as part of its strategy to expand access to 300mm manufacturing capacity without building new fabs, under which it planned to invest up to USD 300 million in equipment and other fixed assets to be installed at Intel’s New Mexico facility.
The disclosure came alongside Tower Semiconductor reporting record fourth-quarter revenue of USD 440 million, up 14% year-on-year, and full-year 2025 revenue of USD 1.57 billion. Tower also announced an additional USD 270 million in capital expenditure for silicon photonics capacity expansion, bringing total planned SiPho and SiGe investments to USD 920 million.